Chinese fitness app Qubu is just a project to take advantage of Blockchain to scam
Another cryptocurrency scam from China. This time is a fitness app called Qubu. There was no initial investment. All you had to do was take regular walks. But if something sounds too good, this is likely a scam.
Chinese fitness app Qubu under investigation for illegal fundraising behavior and financial fraud
Qubu is a Chinese fitness app that applies cryptocurrency to everyday life. When using Qubu, users only need to perform a simple task that is walking 4,000 steps per day, for about 45 days. If maintained correctly for the specified period, they will receive 15 “candies.” Candies are the name of the native token in the Qubu application.
The Changsha government has received more than a dozen letters asking about the legitimacy of Qubu (Image via IC Photo)
Unlike other utility tokens, Candies are used to unlock more complex tasks, giving higher rewards or exchanging cash. Moreover, Candies are also sold publicly on the market as an asset management tool that brings investment returns of up to 36.8% for more than 60 days. Registration to join Qubu is quite simple. You only need to provide your name, identity card number, and Alipay account information and pay one Yuan fee. There was no initial investment. All you had to do was take regular walks.
Like most Ponzi programs, Qubu also relies on its users to get new people on board. The platform emphasizes the importance of recruiting and dividing its subscribers into five levels. The more people you sign up, the more you earn commissions (via the candy output percentage of your downline), and the faster you move up the pyramid.
After signing up, you can buy bundles of its virtual currency from other users using actual cash. Qubu only takes 25 – 50% of the transaction fee. Higher-level users will pay lower fees. By December 2019, Qubu had 95 million registered users. If this information is accurate, nearly one-tenth of mobile users in China have joined Qubu.
Yan, a Qubu user, said he spent 15,000 Yuan (about $2,150) on Qubu. Yan bought hundreds of candies not long after being introduced to Qubu earlier this year. However, Yan is currently quite bewildered after Qubu was investigated for illegal fundraising and financial fraud by the market regulator in Changsha, capital of central China’s Hunan province, where the company was based. Qubu has since expanded to have relocated to the southwest municipality of Chongqing.
It turns out that China’s Blockchain push only paves the way for high-tech crime
Qubu’s development has tackled a dilemma facing regulators in China. That’s after the central government actively promoted Blockchain, to the point that President Xi Jinping told his politburo members that digital ledger technology is a significant breakthrough and that China must become a global leader, will Blockchain be applied to illegal activities? Blockchain, for example, is sometimes associated with Ponzi schemes, primarily through fake ICOs.
Du Xiang, who led a grassroots group exposing pyramid schemes across the country, said the danger of Qubu and similar Ponzis was targeting low literacy investors. They will think they are innovating and following the social trend of applying Blockchain technology.
Although Qubu advertises itself as a Blockchain project, this model has nothing to do with decentralized ledger technology. This company is likely only to use the word Blockchain to attract people’s attention. Most investors trapped by Qubu didn’t report to the police because they were still hoping to get their investment back after the scandal settled down.
Whether the Qubu app has now been removed from the App Store or CH Play, however, there are no fewer than twenty other similar fitness applications taking the reason for operating on Blockchain in China at the end of November.
Commenting on Qubu and its copycats, Zheng Xiaofei, editor of Feifan Fenghuotai, an anti-fraud consultancy, said:
“Blockchain is just a concept they use to cheat.”
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